What are your views on the fractionisation of artwork?
For those unaware of what this even is, here's a quick overview:
👉 A digital art-backed NFT or physical art piece backed by NFTs that can be divided into smaller pieces, allowing multiple investors to gain partial ownership of it.
NFT fractionalisation has made it easier for crypto art and physical art enthusiasts and investors to get hold of some of the world’s most expensive pieces or own a share of an expensive and famous physical art piece.
As seems to be the case with any new tech, there are advantages and disadvantages:⬇️⬇️⬇️⬇️
đź’ˇAdvantagesđź’ˇ
âś… Increased accessibility to those who can't afford high-priced art which could lead to opening up the art industry
âś… Fractionalisation can increase liquidity in the art market.
âś… Investors can diversify their art investments by holding fractional shares in multiple artworks rather than concentrating their investment on a single piece.
âś… Ownership can be determined directly on blockchain bringing needed transparency.
🚨Disadvantages🚨
❌ Legal and regulatory challenges, especially in terms of compliance with securities laws.
❌ Complex Ownership Structure
❌ Could attract solely speculative behaviours rather than buying art because you love it.
❌ Fractionalisation could lead to a perception of dilution of the artwork's cultural or aesthetic value
Most importantly, The big disadvantage for me here is regulations and securities laws. This is still convoluted and muddled, with many projects from the past being pulled up and audited, with some being fined.
Have you, or would you, buy fractionalised artwork? 🤔